Ford Motor Posts $1.3 Billion Net Loss in Q2 as China Strategy Enters Critical Adjustment Phase

On July 28 local time, Ford Motor released its financial results for the second quarter of 2026.

The company's total revenue for the quarter was $48.3 billion, a 4% year-over-year decline. Under Generally Accepted Accounting Principles (GAAP), it reported a net loss of $1.3 billion, compared to a net loss of $36 million in the same period last year.

However, the loss was primarily driven by one-time items, specifically a $3.6 billion non-cash charge related to the disposal of the BlueOval SK battery joint venture in May, and a $500 million charge from previously canceled electric vehicle projects. These special charges totaled approximately $4.2 billion.

Excluding one-time items, Ford's adjusted earnings before interest and taxes (EBIT) for the quarter amounted to $2.5 billion, an increase of $400 million, or about 19%, year over year. Adjusted earnings per share (EPS) were $0.42, beating the average analyst expectation of $0.35. Revenue also exceeded Wall Street's expectation of $47.51 billion. As of the end of the second quarter, the company's total liquidity exceeded $43 billion.

By business segment, the Ford Blue internal combustion engine business generated revenue of $26.1 billion in the quarter, a 1% year-over-year increase. EBIT was $1.1 billion, up 72% year over year.

The Ford Pro commercial vehicle business reported revenue of $17.8 billion, a 5% year-over-year decline, with EBIT of $1.7 billion.

The Model e electric vehicle business saw revenue fall 56% year over year to $1 billion. The segment recorded an EBIT loss of $919 million for the quarter, marking the third consecutive quarter of year-over-year loss reduction.

The BOSK joint venture was established by Ford and South Korea's SK On in 2022, with an original plan to invest $11.4 billion to build three battery plants in the United States. In May this year, the two parties completed the split, with Ford taking over two plants in Kentucky and SK On taking over the plant in Tennessee. Ford stated that the relevant assets will be used for its battery energy storage business, Ford Energy, a newly opened business area for the company.

The main challenge for Ford's business in China is that while sales have temporarily stabilized, new energy products have yet to fill the gap.

According to data released by Ford China, sales in the Chinese market totaled 158,589 units in the second quarter of 2026, a 3% increase from the same period last year. However, this growth was built on a low base.

For Changan Ford, retail data from third-party platforms showed cumulative sales of only 28,800 units in the first half of 2026. In 2025, Changan Ford's annual retail sales were 99,400 units, a significant drop from 247,000 units in 2024, falling below the industry-recognized annual "survival red line" of 100,000 units for the first time.

From a longer-term perspective, Ford's sales in China have been shrinking continuously from their peak of 1.27 million units in 2016.

At the product level, Changan Ford's current mainstay models remain focused on internal combustion engine vehicles such as the Mondeo, Edge, and Explorer, with new energy products largely absent. The all-electric Ford Mustang Mach-E, previously highly anticipated, has seen sluggish market performance due to issues with product competitiveness and pricing.

In December 2025, the Ford Bronco PHEV/EV was launched, offering extended-range and pure electric powertrain versions, with prices starting at 229,800 yuan. Additionally, Changan Ford plans to launch a new energy sedan codenamed CX810, which is viewed as a key product for Ford's new energy transition in China.

Strategically, Ford China has defined 2026 as a year of "transformation, innovation, and intensified effort." At the dealer conference in January this year, Wu Shengbo, President and CEO of Ford China, clarified a product strategy covering internal combustion, hybrid, extended-range, and pure electric powertrains.

In terms of channels, Ford China established a wholly-owned sales service company in September 2025, which officially began operations on October 1, 2025. This move integrates the two dealer networks of Changan Ford and Ford Beyond, uniformly managing the sales of all Ford brand passenger cars and pickup trucks in China.

Despite reporting a net loss on the books in the second quarter, Ford raised its full-year performance guidance for the second time this year. The company raised its 2026 adjusted EBIT forecast from $8.5–$10.5 billion to $10–$11 billion, and its adjusted free cash flow forecast from $5–$6 billion to $6–$7 billion.

Ford CEO Jim Farley stated in the earnings release: "We delivered another strong quarter and raised our full-year guidance. But more importantly, there is growing evidence that Ford is becoming a more profitable, more disciplined, and truly different company."

Overall, operational improvements in Ford's core North American market combined with one-time strategic restructuring costs led to a reported net loss, but core profits excluding one-time items exceeded market expectations.

In the Chinese market, the American automaker is seeking new growth paths through product updates and channel integration, but the effectiveness remains to be verified in subsequent quarters.